What’s in Today’s Article?
- About LFPR (Meaning, Paper Released by EAC-PM)
- Key Findings of the Paper (Govt. Initiatives, Criticism, etc.)
What is LFPR?
- According to the CMIE, the labour force consists of persons who are of age 15 years or older, and belong to either of the following two categories:
- Employed
- Unemployed and are willing to work and are actively looking for a job
- There is a crucial commonality between the two categories — they both have people “demanding” jobs. This demand is what Labour Force Participation Rate (LFPR) refers to.
- While those in category 1 succeed in getting a job, those in category 2 fail to do so.
- Essentially, LFPR is the number of people ages 15 and older who are employed or actively seeking employment, divided by the total non-institutionalized, civilian working-age population.
- LFPR represents the demand for jobs in an economy.
- On the other hand, Unemployment Rate (UER), which is routinely quoted in the news, is nothing but the number of unemployed (category 2) as a proportion of the labour force.
Paper Released by EAC-PM:
- The female LFPR in India has shown remarkable improvement between 2017-18 and 2022-23, with rural areas witnessing larger gains than urban areas.
- According to a working paper released by the Economic Advisory Council to the Prime Minister (EAC-PM), this trend highlights the growing involvement of women in the workforce, though regional disparities persist.
Key Findings:
- National Trends:
- Rural LFPR: Increased from 24.6% in 2017-18 to 41.5% in 2022-23, marking a 69% growth.
- Urban LFPR: Rose from 20.4% to 25.4% during the same period.
- The increase remains consistent even after excluding unpaid family workers, suggesting a genuine rise in women entering the workforce.
- Regional Disparities:
- States like Bihar, Punjab, and Haryana have consistently reported low female LFPR despite their contrasting economic statuses (Bihar being the poorest and Punjab and Haryana among the richest states).
- North-eastern States: Rural areas, especially in Nagaland and Arunachal Pradesh, have seen significant improvements in LFPR.
- Eastern States: Rural Bihar had the lowest LFPR but showed notable progress in recent years, particularly among married women.
- Demographic Insights:
- Marital Status: Married women exhibit significantly lower LFPR compared to men, particularly in urban areas. For men, LFPR remains consistently high across age groups.
- Age Distribution: Female LFPR peaks between ages 30-40 and declines sharply thereafter, forming a bell-shaped curve. In contrast, male LFPR remains high (nearly 100%) for ages 30-50 and declines gradually.
Government Initiatives Supporting Women’s Employment:
- The report highlights several government schemes aimed at empowering women and boosting female LFPR:
- Mudra Loans: Provides financial assistance to women entrepreneurs.
- Drone Didi Scheme: Focuses on skill development for women in emerging technologies like drones.
- Deendayal Antyodaya Yojana: Promotes women-led development through self-help groups.
- While the initiatives have played a role in supporting women's participation in the workforce, the paper calls for more rigorous research to evaluate their long-term impact.
Criticism:
- Critics have pointed out that much of the increase in female LFPR has been attributed to unpaid family work.
- However, the paper counters this by emphasizing that the overall trend remains positive even when unpaid work is excluded.
- The study also notes the need for future research to assess how government schemes have influenced this rise.
Conclusion:
- The rise in female LFPR between 2017-18 and 2022-23 marks a significant shift in women's employment in India, particularly in rural areas.
- However, challenges like regional disparities, lower participation among married women, and the need for sustainable, paid employment opportunities persist.
- Policymakers must focus on targeted interventions and better implementation of women-centric schemes to ensure sustained growth in female workforce participation.
